Four steps to drive supplier innovation

Will Green is news editor of Supply Management
28 September 2018

Buyers should develop an “outside in, inside out” dialogue with suppliers to drive innovation.

Delegates at the Gartner Supply Chain Executive Conference in London were told to move the conversation away from spend and savings to build partnerships.

Geraint John, research vice president at Gartner, set out four steps to harness supplier innovation.

1. Develop stronger ties with innovation colleagues. “What role could you play in developing this outside-in-inside-out dialogue?” he said.

2. Listen to suppliers. “Listen to their proposals. Use joint action to move from listening to action.”

3. Don’t use innovation as a cover for cost cutting. “If you’re trying to innovate on products you can’t have a conversation about that and then bring in people who want to hit the cost reduction target.”

4. Invest in relationship-building capabilities. “We are talking about building trust between humans.”

Luis Allo, global director R&D, external technology innovation, consumer self care at Johnson & Johnson, said the creation of ecosystems and partnerships was built into the company’s model.

“I think suppliers play a significant role in how to drive innovation,” he said. “That’s still under-represented in most innovation models. They are not geared towards suppliers; they are geared towards universities and startups.

“There are still very traditional ways that we look at relationships that create the opposite effect. Who wants to go to a SRM, procurement-driven meeting about savings? Procurement and supply chain innovators take opportunities to change that conversation.”

Allo said there had been internal and external barriers to building partnerships. “It’s about driving a different narrative,” he said. “How do you look at a completely different set of values in that relationship to make it attractive?

“What are those relationships that bring unique opportunities to differentiate? Look at that rather than spend and savings.

“It hasn’t been easy. It has been complicated internally and externally.”

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